How BMW Is Defusing the Demographic Time Bomb

In June 2007, Nikolaus Bauer, the head of BMW's 2,500-employee power train plant in Dingolfing, Lower Bavaria, asked two of his production line managers, "How are we going to maintain our productivity as the workforce gets older and older?" BMW is not the only company with this concern. Corporate leaders, politicians, and labor economists in most developed nations are worried about the consequences of demographic change in their labor markets, which increasingly consist of older workers. Instead of turning to traditional approaches-firing older workers, forcing them into early retirement, or moving them to less physically demanding jobs-managers at the BMW plant let the workers themselves find a solution. The company staffed a production line with people who were, on average, 47 years old-reflecting the plant's projected demographic makeup in 2017. The workers on this pilot line, supported by senior management and technical experts, then developed and implemented 70 productivity-enhancing changes, such as managing health care and making small changes to the workplace environment. The total cost of the changes was just around 40,000 euros, but the result was a productivity increase of 7% in one year. BMW is now testing this worker-led approach in other types of plants in the United States, Germany, and Austria in order to develop standards for incorporation across the company's manufacturing organization. As global companies come to grips with the strategic challenges in the years ahead, they may find that the brainpower of their workforce is the most important differentiating factor.

• Personal productivity
• Employee empowerment